Good evening, Mr. Chair, and thank you for inviting me to appear before you today.
As you mentioned, my name is Isabelle Jacques. I am the assistant deputy minister of the financial sector policy branch at Finance Canada.
I'm here today to explain the measures contained in the Emergency Economic Measures Order.
As you know, the order was adopted by the government pursuant to the Emergencies Act. It was in force upon its registration on February 15 until its revocation on February 23. The order was not retroactive.
The first category of measures in the Order required financial service providers to cease providing financial services to any individual or entity engaged, directly or indirectly, in activities prohibited by the Emergency Measures Regulations. The Order referred to such an individual or entity as a “designated person”.
The industry told the Department that their actions taken in response to the Order resulted in the freezing of approximately 280 financial products, such as savings and chequing accounts, credit cards and lines of credit, for a total of approximately $8,000,000, including $3,800,000 from a payment service provider.
We understand that financial service providers undertook these actions based in large part on information provided by the RCMP. The Order authorized law enforcement agencies, and other government institutions, to disclose information to financial service providers to apply the Order.
In addition, the order required financial service providers to determine on a continuing basis whether they were in possession of a designated person's property and to disclose to the RCMP or CSIS the existence of such property and any information they could have had about associated transactions.
The measures in the order were targeted exclusively at designated persons, and financial service providers were required to resume providing financial services when a designated person ceased engaging in activities prohibited by the regulations.
I also understand that financial service providers began unfreezing accounts, credit cards and lines of credit on February 21, after receiving additional and updated information from the RCMP. All accounts frozen in response to the order had been unfrozen by February 24.
The other broad category of measures in the Order was specifically aimed at crowdfunding platforms and payment service providers that were not subject to the obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The Order extended certain anti-money laundering and anti-terrorist financing requirements, such as registration with the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, and the reporting of suspicious and large value transactions, to crowdfunding platforms and some payment service providers that were in possession of a designated person’s property.
The measure reduced the risks that these platforms and payment service providers could receive funds from illicit sources, and increase the quality and quantity of financial transaction information received by FINTRAC, which would in turn make more information available to support investigations by law enforcement.
Thank you.
We will be pleased to answer your questions.